Tyson Foods Inc (TSN)
Inventory turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 50,250,000 | 46,614,000 | 40,523,000 | 37,801,000 | 37,383,000 |
| Inventory | US$ in thousands | 5,328,000 | 5,514,000 | 4,382,000 | 3,859,000 | 3,929,000 |
| Inventory turnover | 9.43 | 8.45 | 9.25 | 9.80 | 9.51 |
September 30, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $50,250,000K ÷ $5,328,000K
= 9.43
Inventory turnover is a crucial financial ratio that measures how efficiently a company manages its inventory. It indicates the number of times a company's inventory is sold and replaced over a specific period. For Tyson Foods, Inc., the inventory turnover has shown a positive trend over the last five years, indicating improvements in inventory management.
In 2023, the inventory turnover ratio reached 9.43, suggesting that Tyson Foods, Inc. converted its inventory into sales nearly 9.43 times during the year. This represents an increase from the previous year's ratio of 8.45 in 2022, signifying enhanced efficiency in inventory management.
The rise in inventory turnover indicates that Tyson Foods, Inc. maintained an optimal level of inventory relative to its sales volume, thereby reducing holding costs and potential obsolescence. This improvement can be attributed to effective inventory management practices, such as accurate demand forecasting, streamlining of supply chain processes, and efficient production scheduling.
Overall, the increasing trend in the inventory turnover ratio reflects Tyson Foods, Inc.'s efforts to enhance its operational efficiency and optimize working capital management, which is a positive signal for the company’s financial health and potential for improved profitability.
Peer comparison
Sep 30, 2023